How demographic change will help challenge the existence of ageism: Who’s ready to lead?
The signals get louder:
January 2023 saw louder signals emerging - reinforcing the global demographic trend towards ageing populations. In France we saw mass protests opposing a two-year age increase for pension eligibility. In Australia, newspaper articles focussed on our shrinking birth rate and its implications for our future population. In China reports confirmed that the country is now moving into continual population decline. At the World Economic Forum considerable focus was given to the emerging ‘longevity economy’. The implicit thread of these signals is that declining birth rates and everyone living longer will spell economic disaster. There will be too few workers to help finance our pension systems, healthcare costs will explode, government debt will accelerate and a lack of economic growth will destroy our living standards. These speculations continue to reinforce the ‘grey tsunami’ mantra - that an ageing demographic must be resisted and the country has to stay ‘young’.
Are we missing an opportunity?
I fear that we are missing a great opportunity to reframe the population debate.
We need to overturn the institutionalised view that an ageing population is a social and economic negative and instead explore how an older demography can be a source of opportunity and value.
Being stuck with an out-of-date meaning of ageing is distorting our discussions on population structure and national well-being. We need to change the narrative (in media and business conversations) to focus on inclusion and diversity as a universal value informing our economic and social well-being. This means an explicit recognition that the existence of ageism is a drag on our productivity, innovation and our economic & social well-being.
While negative views on ageing can be traced back to the Industrial Revolution, in Australia, we adopted a fixed negative view of ageing in the 1960’s with the “life cycle” view - encompassing a brief period of education, followed by a long period of work and then followed by a brief period of retirement. While this concept might have been fit for purpose sixty years ago, it now appears a quaint historical artefact when overlaid with our current reality dominated by dysfunctional change and the overturning of so many traditional social norms.
We are now living significantly longer on average (average age in 1960’s was 71 years whereas average age in 2022 is 84 years). Although a person of 65 today is likely to be significantly healthier (physically and cognitively) than a person of 65 in the 1960s, somehow we seem stuck with a last-century view of what the age of 65 may represent. Such an attitude seems paradoxical when government and business have championed increasingly progressive and enlightened social attitudes to gender, ethnicity and disability.
A recent book by demographer Paul Morland (see References) uses data and statistics to explore what living in an older world may represent. Demographic research highlights that in the developed world, and large parts of the developing world, there are declining birth rates which are contributing to slowing population growth. This trend, in combination with increased human longevity, is seeing a rising median age in most countries. The consequence of these two factors will be a proliferation of the elderly. While demographic momentum will still ensure our world’s population grows, this will at a slower rate. We have already reached our ‘peak child’ moment at which the number of children in the world has stopped increasing. By the end of the century there are likely to be 50% more people on the planet, but there will be fifty million fewer aged under five.
An ageing population, coupled with today’s ingrained belief of economic growth as the foundation for a better world will present challenges. A dwindling number of younger people entering the workforce in combination with the likelihood of a decline in mass migration will contribute to a slowing in economic growth. Japan is currently used as an example of this emerging future. Fewer workers entering the workforce reduce the potential for the government to raise funds through taxation. An ageing world will also impact generational politics for decades with the proliferation of the elderly posing new challenges to countries where increasing expectations of the State may struggle to be met under existing social policies and economic policy settings.
How can we reap the benefits of an ageing world?
Older societies bring distinct opportunities for business as the tastes and requirements of the population change. McKinsey forecasts western Europeans aged over sixty years will account for 59% of consumption growth in cities between now and 2030. In the UK people over fifty years of age represent a third of the population yet possess nearly 80% of its wealth. In Australia, people over sixty years represent more than a quarter of the population, hold 46% of our disposable income, 50% of our private wealth and outspend millennials in entertainment, auto, health, travel and almost every other category. Research also presents that US citizens over fifty years own approximately 70% of the country’s disposable income yet remain a demographic group still being ignored by marketers. The Boston Consulting Group has found that less than 15% of companies have a defined business strategy for people over 60 years, with the majority of companies failing to account for increasing longevity within their sales and marketing planning.
Research reveals that older societies are less prone to war and conflict. Societies shying away from war are not just those with the restraining influence of older populations, but those with fewer young people they are prepared to lose. Not only are older societies more peaceful, they are less crime ridden and also more conducive to democracy. This raises the question of how much of our future taxation and debt financing directed towards proposed defence spending might be better utilised redirected towards embracing a longevity society and economy?
The most powerful reasons why ageing societies struggle to grow economically is the decline in the size of their workforce. Creating opportunities for people to work longer, whilst not a total solution becomes an important contributor to maintaining economic growth. People working longer also reduces potential strain on State pension systems. In the UK the number of working people over the age of 70 has risen by 135% in a decade.
The emergence of a life- long learning mindset will also be important. If people wish to work for longer, they must be prepared to invest in ongoing skill and knowledge development. Re-invention is also an exciting possibility. Data shows there is a strong correlation between educational attainment and economic achievement when comparing both individuals and countries.
Existing economic theory orthodoxy may be unhelpful in this new world. New concepts might create new possibilities. Post-modern monetary theory whilst still in its infancy advocates that the role of the state is no longer to invest only at times of private sector uncertainty but permanently to increase demand to the level required for full employment. The theory contends that the private sector has become ossified such that it is no longer able to drive the economy without government support, for reasons that are at least in part demographic.
An ageing time-bomb is not a foregone conclusion. Policymakers and business leaders can change this existing narrative. The 2023 World Economic Forum chose to focus on the ‘longevity economy’, recognising that if we are all living longer then we are going to have to adjust business thinking and life goals and recognise everyone will be working longer in the future. A first step in delivering this outcome will be for governments and industry to jettison outmoded negative stereotypes of older workers and actively work to establish age inclusive workplaces. Population structural change will be a powerful driver in forcing attitude change to ageing.
What’s our role in reaping the benefits?
So, if you are an existing CEO or strategic HR executive, I’d be challenging my company with four questions:
Does our strategy embrace our changing population age structure?
Do we have a business plan and marketing plan to access people over 60 years of age?
Is our talent meaning still fit for purpose or becoming dated within an emerging longevity economy?
To what extent does our existing culture continue to embed ageism within our everyday operations?
If the above editorial and questions have made you reflect on your workplace dynamics, please contact us and let us help you take practical steps to transform your existing workplace into an inclusive age neutral one that develops your competitive and performance capability.
References
Applewhite, A. (2016). This chair rocks: A manifesto against ageism. Great Britain: Melville House. UK.
Fineman, S. (2011). Organizing Age. Oxford University Press. New York.
Honore, C. (2018). Bolder: Making the Most of Our Longer Lives; Simon & Schuster Great Britain.
Morland, P. (2022). Tomorrow’s People. The Future of Humanity in Ten Numbers. Picador. London.
The Economist, 8 July 2017. Over 65 shades of grey. https://www.economist.com/leaders/2017/07/06/what-to-call-the-time-of-life-between-work-and-old-age
The Boomer Guide 2021-22 edition.
https://startsat60.com/starts-at-60-boomer-guide-2021-22
Warner, B. (2023). The centenarian conundrum. Sydney Morning Herald, (Jan 23).
